PREVIEW-Godrej Consumer April-June net seen up 22 pct
MUMBAI, July 21 (Reuters) - Godrej Consumer Products Ltd (GOCP.BO: Quote, Profile, Research) is expected to post a 22 percent growth in net profit in the quarter to June driven by rising consumer spends, product launches and a recent acquisition, analysts said.
The company's net profit is seen at 472 million rupees on a net sales growth of about 15 percent to 3.3 billion rupees, according to a Reuters poll of analysts.
"There is more contribution from higher-margin businesses -- Kinky and hair colour," said Anand Shah, analyst with Angel Broking.
Kinky has a net profit margin of 30-35 percent, Chairman Adi Godrej had said at an analysts meet in May.
In the last quarter of FY08, the consumer products maker relaunched 'Godrej Expert Hair Dye' and soap brand 'Cinthol'. It also completed the acquisition of South African hair brand 'Kinky', which is expected to widen its consumer base.
Cinthol's relaunch would help drive topline growth and moderation of ad spends is likely to help the company retain margins, a recent Kotak Institutional Equities report said.
Fast-moving consumer goods firms are protecting margins through product price increases and cost-saving initiatives in the face of rising prices of raw materials like vegetable oils.
Crude oil, rising over 50 percent in the year to March-end, has added to packaging costs and inflation.
Rising inflation and interest rates coupled with a slowdown in overall economic growth could lead to moderation in consumer spending in coming quarters, analysts said. Continued...
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